ALJDEC decisions subject to certification as final

2022A-00755-NPC-ROC · Registrar of Contractors · 2022-09-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

New Level Contracting, LLC,

COMPLAINANT

First Choice Restoration, Inc.,

License No. ROC 193849,

RESPONDENT

No. 2022A-00755-NPC-ROC

ADMINISTRATIVE LAW JUDGE

DECISION

HEARING: September 6, 2022

APPEARANCES: Ryan Bailey, Esq. represented Complainant New Level Contracting, LLC. Erik Biddlecome and Lisa Angeny appeared as witnesses for Complainant. Sam Richardson, Esq. represented Respondent First Choice Restoration, Inc. Jana Hoffman appeared as a witness for Respondent.

ADMINISTRATIVE LAW JUDGE: Sondra J. Vanella

FINDINGS OF FACT

First Choice Restoration, Inc. (“Respondent”) is the holder of License No. 193849, issued by the Arizona Registrar of Contractors (“Registrar”).

On or about January 27, 2022 and January 31, 2022, New Level Contracting, LLC (“Complainant”) filed seven Complaints against Respondent with the Registrar alleging that Respondent had failed to pay Complainant the total sum of $59,477.39 for construction work performed on seven separate projects.

On or about February 14, 2022, and February 24, 2022, the Registrar issued Citations charging Respondent with alleged violations of A.R.S. § 32-1154(A)(10). Respondent timely filed Answers to the Citations.

The Registrar thereafter consolidated all of the Complaints and set them for consolidated hearing.

The hearing of this matter was scheduled to convene on May 19, 2022, at 9:00 a.m. On the date and time set for hearing, Ryan Bailey, Esq. represented Complainant. Erik Biddlecome and Lisa Angeny appeared as witnesses for Complainant. Sam Richardson, Esq. represented Respondent. Jana Hoffman appeared as a witness for Respondent.

The parties participated in a prehearing discussion outside of the presence of the Administrative Law Judge. As a result of that discussion, the parties requested a continuance of the hearing in order to provide them an opportunity to continue with settlement negotiations.

The continuance was granted and the matter was set for a Status Update on June 20, 2022.

On June 24, 2022, Complainant filed a Status Update informing the Tribunal that the parties were unable to reach a resolution and requested that the matter be re-set for hearing.

The hearing of this matter ultimately convened on September 6, 2022, at 9:00 a.m. On the date and time set for hearing, Mr. Bailey represented Complainant. Mr. Biddlecome and Ms. Angeny appeared as witnesses for Complainant. Mr. Richardson represented Respondent. Ms. Hoffman appeared as a witness for Respondent, however, did not testify.

Complainant’s Exhibits 1 through 19 were admitted into evidence. Respondent did not offer any exhibits.

At the outset of the hearing, Complainant asserted that the remaining balance due and owing from Respondent is $45,534.34. Respondent asserted that there is a credit balance due and owing to Respondent from Complainant in the amount of $4,052.00.

The parties began their working relationship in early 2020, with Complainant performing various contracting work for Respondent on multiple projects. Many of the projects were “insurance” projects, while others were private pay. The parties did not utilize written contracts and much of the agreed upon work was discussed via email or verbally with Respondent’s project manager, Kelly Weimer, who was not present at the hearing and did not provide testimony.

Mr. Biddlecome, owner of Complainant, testified that when Respondent had an “insurance” project for Complainant, Respondent would email Complainant the budget provided by the insurance company. Mr. Biddlecome testified that Respondent paid Complainant’s invoices when Complainant needed to pay for materials or labor. Mr. Biddlecome testified regarding the various projects for which Complainant contends Respondent failed to pay.

Henderson Project

Mr. Biddlecome testified that the original invoice for the Henderson Project was $8,684.02, and that Respondent paid $4,000.00, leaving a balance of $4,684.02. Mr. Biddlecome testified that Complainant completed the Henderson Project with the exception of minor punch list items that Complainant was having difficulty completing due to “tenant issues.” Mr. Biddlecome testified that after approximately five months of inquiring when Complainant could complete the punch list items, Respondent informed Complainant that those items had been completed by Respondent.

The Administrative Law Judge notes that the Henderson Project invoice is itemized and has a set price for every line item of work.

Foster Project

Mr. Biddlecome testified that the original invoice for the Foster Project was $92,915.14, and that Respondent paid $83,739.27, leaving a balance of $9,175.87. Mr. Biddlecome testified that Complainant completed the project and the homeowner is “happy.”

The Administrative Law Judge notes that the Foster Project invoice is itemized and has a set price for every line item of work.

Bouquot Project

Mr. Biddlecome testified that the Bouquot Project consisted of three invoices for $1,000.00, $1,350.00, and $850.00, and was complete, however, there was an issue with the dampener malfunctioning and Respondent paid to have it repaired. Mr. Biddlecome testified that Complainant attempted to pay the contractor that made the repair, but was told that Respondent would pay. All of the invoices state with specificity the scope of work and the amounts charged for the work.

Kingman Project

Mr. Biddlecome testified that the original invoice for the Kingman Project was $54,798.88, and that Respondent paid $52,172.51, leaving a balance of $2,626.37. Mr. Biddlecome testified that all work was completed. Mr. Biddlecome also testified that Complainant submitted a change order/supplement to Respondent for the increased cost for lumber, trusses, and materials, in the amount of $4,559.75, as well as an invoice in the amount of $200.00 that Complainant paid toward the neighbor’s electric bill as Complainant needed to use the electricity from the neighbor’s unit because there was no electricity at the project site. All three invoices are specific as to the application of the amounts charged.

Mr. Biddlecome asserted that Respondent’s project manager, Mr. Weimer, approved all change orders and the payment for electric. Complainant did not call Mr. Weimer as a witness and did not provide any documentary evidence establishing an approval.

Portland II HOA

Mr. Biddlecome testified that Complainant submitted a supplement to Respondent in the amount of $6,300.00 for additional stucco work. Mr. Biddlecome asserted that the supplement was approved and paid to Respondent by the insurance company. Mr. Biddlecome did not provide any documentary evidence establishing this assertion. Mr. Biddlecome explained that initially, Respondent was only replacing some windows on the project, however, all of the windows needed to be replaced, resulting in the additional stucco work, and therefore, the initial estimate for the work was “inadequate.” Mr. Biddlecome asserted that Mr. Weimer approved the supplement, there were no issues on the job, and the work was completed. Complainant did not call Mr. Weimer as a witness to corroborate Mr. Biddlecome’s testimony.

Baker Project

Mr. Biddlecome testified that the balance owing from Respondent to Complainant on the Baker Project is $1,427.34. Mr. Biddlecome testified that Complainant measured the exact window sizes and installed the windows, with the exception of three windows for which Respondent had enlarged the window openings. Mr. Biddlecome asserted that Respondent acknowledged the issue and indicated that it would order three additional windows that were the correct size.

During the course of the hearing. Mr. Biddlecome realized that Complainant over-invoiced Respondent by $180.00 on this project.

Auto Shop Project

The original invoice for the Auto Shop Project in the amount of $57,686.15 was not provided by Complainant at the hearing because according to Mr. Biddlecome, it was paid in full by Respondent.

Mr. Biddlecome testified that Complainant submitted two supplements to Respondent, one in the amount of $29,354.84, and another in the amount of $950.00. Mr. Biddlecome explained that the $950.00 supplement was for additional electrical work in order to bring the project into code compliance. The invoices delineate the amounts charged for each scope of work. Mr. Biddlecome testified that there were no issues with the work and that Respondent was paid by insurance. Again, Complainant did not provide any documentation corroborating this assertion.

Vistancia

Mr. Biddlecome testified that the Vistancia Project was a “general bid” remodel project. Mr. Biddlecome testified that the initial invoice for the Vistancia Project was $64,600.00, with an added change order in the amount of $5,455.00, for a total invoice amount of $70,055.00. Mr. Biddlecome testified that there were two additional supplements/change orders for the Vistancia Project, one for concrete work in the amount of $1,800.00, and one for painting in the amount of $1,500.00, for a total project amount of $73,355.00.

Mr. Biddlecome testified that Complainant did not complete the Vistancia Project, and that the final invoice for the project, number 1074, highlights the areas of the project that were completed. The project was comprised of a West Building, an East Building, and a South Building. It is important to note, that unlike the other invoices Complainant provided to Respondent, the Vistancia invoice fails to delineate a price for all of the line items in its scope of work and does not designate a price per building.

Mr. Biddlecome testified that Complainant did no work with respect to the storefront doors because the manager of the buildings wanted to upgrade the doors to include panic buttons and carded entries, and the estimate that Complainant provided, in the amount of $35,500.00, doubled the original estimate of $15,000.00 (which is not delineated in the invoice). Mr. Biddlecome asserted that the increase in price of the doors angered the property manager which resulted in the project “falling apart.”

Complainant admittedly did not perform the full scope of work in the East and West Buildings, and it did not perform any of its scope of work in the South Building.

Mr. Biddlecome testified that he believed that Complainant did not complete $35,355.00 worth of work on the project, leaving an initial balance due and owing to Complainant from Respondent of $38,000.00. Respondent paid Complainant $30,000.00 toward the Vistancia Project, and then applied $13,610.14 that was reallocated from another project, the Church Project, toward the Vistancia Project, and another reallocation of $11,503.71 from another project. Mr. Biddlecome testified that Respondent paid Complainant $55,113.85 toward the Vistancia Project. Mr. Biddlecome testified that Respondent overpaid Complainant $17,113.85 toward the Vistancia Project.

Mr. Biddlecome testified that the Vistancia invoice was based upon a “total figure in his mind,” “was not broken down,” and was based on “time and materials.” Mr. Biddlecome further testified that the estimate Complainant provided to Respondent for the doors in the Vistancia invoice was a “$15,000.00 per door guestimate.”

Because there were no prices associated with any of the line items of the scope of work for the Vistancia Project, there is no way to ascertain the actual value/price Complainant attributed to each line item that Complainant asserted it completed and calculated to equate to the full dollar amount of the invoice.

Lisa Angeny, part owner of Complainant, testified that during the course of the projects at issue, she “primarily handled billing.” Ms. Angeny testified that during a July 15, 2021 meeting between the parties, the parties agreed on the outstanding amounts due and owing to Complainant. However, Ms. Angeny testified that since that meeting, additional credits to Respondent need to be taken into account. Ms. Angeny further testified that after the meeting, Respondent made some payments to Complainant.

Regarding the Auto Shop Project, Ms. Angeny testified that the initial invoice was for approximately $50,000.00, not $57,686.15, as testified to by Mr. Biddlecome. This is a $7,000.00 discrepancy. Ms. Angeny acknowledged that she “just sends out bills” based upon what Mr. Biddlecome tells her the invoices should be and that Mr. Biddlecome’s testimony at hearing reflected what the amounts should be. Ms. Angeny testified that she was “not clear regarding the $7,000.00 difference” in the Auto Shop Project invoices.

Ms. Angeny further testified that the amount of $14,941.15 shown as due and owing on the Vistancia Project invoice is not accurate, and further, that she “assumes” and “believes” that a $5,000.00 door deposit was credited back to Respondent.

Respondent made a motion to dismiss arguing that the parties’ pattern and practice of applying amounts from various jobs to other jobs, coupled with Complainant’s admission that it owes Respondent a minimum of $17,000.00 toward the Vistancia Project, the amount of work not completed on Vistancia by Complainant exceeded $36,000.00, and that Complainant’s figures “do not make sense” and “are inaccurate,” demonstrate that Complainant has not met its burden of proof in this case.

The Administrative Law Judge finds that Complainant’s figures changed throughout the course of the hearing, Complainant failed to provide an accurate accounting, as the accounting that was provided was based upon figures contrived by Mr. Biddlecome and endorsed by Ms. Angeny, without corroborating documentation to establish those tenuous amounts. The figures provided with regard to the Vistancia Project are murky at best and there are several discrepancies with regard to the figures provided for the Henderson, Auto Shop, and Baker Projects. Moreover, Complainant acknowledged during the hearing that “due to the business relationship, the invoicing is not ideal” and that “figuring out amounts owed is not easy.”

CONCLUSIONS OF LAW

The burden of proof at an administrative hearing falls to the party asserting a claim, right, or entitlement and the standard of proof on all issues in this matter is by a preponderance of the evidence.

A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.”

A.R.S. § 32-1154(A)(10) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license:

Failure by a licensee or agent or official of a licensee to pay monies in excess of $750 when due for materials or services rendered in connection with the licensee's operations as a contractor unless the licensee proves that the licensee lacks the capacity to pay and has not received sufficient monies as payment for the particular construction work project or operation for which the services or materials were rendered or purchased.

The evidence presented by Complainant established that its accounting is unreliable, and in the case of the Vistancia Project, arbitrary, as the value of the work Complainant claims it completed on the Vistancia Project appears to be based on Mr. Biddlecome’s subjective numbers, as evidenced by the invoice which is not itemized, and there was no testimony or other evidence provided to corroborate the value of the work that was completed and was not completed by Complainant. Complainant admitted that its invoicing “is not ideal” and that “figuring out amounts owed is not easy.” The Administrative Law Judge concludes based upon the evidence presented at hearing by Complainant, that it is not possible to determine what amounts, if any, are owing to Complainant.

The Administrative Law Judge concludes, based upon the evidence of record, that Complainant failed to establish by a preponderance of the evidence, a violation by Respondent of A.R.S. § 32-1154(A)(10).

Therefore, grounds do not exist to impose discipline against Respondent’s license.

RECOMMENDed order

Based on the foregoing, it is recommended that the Registrar dismiss Complainant’s Complaints against Respondent in this consolidated matter.

In the event of certification of this Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of the certification.

-54864001

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-137160-45720000Done this day, September 21, 2022.

/s/ Sondra J. Vanella

Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director

Registrar of Contractors

By Miranda Alvarez

Legal Secretary -54864001

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-137160-45720000